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Volume

Question:

Discuss about the Operations Management of Subway.

As a matter of specification, this segment looks after the four typical marketing components, which the personnel of Subway follow for execution of the marketing activities. These components are:

Volume

The presence of 44413 outlets in 109 countries reflects the voluminous operations of Subway. The production of 5300 sandwiches to the customers is an indication towards the volume of breads, lettuce and the other ingredients for the preparation of the sandwiches, salads and wraps (Subway.com, 2017). In case of Subway, the volume dimension is high. This is because the brand provides employment to 400,000 candidates. Voluminous operations of Subway are reflected from serving 2.6 billion sandwiches a year. To be exact, 16 acres of lettuce is inserted in the sandwiches. The growth in the sales revenue can be correlated with the dimension of high volume. In 2015, the sales revenue was $17 billion in comparison to 11.3billion US $. The international sales revenue was recorded as $5.8 billion. Dedication, commitment and perseverance of the employees took the sales revenue to $5.8 billion. This increased the scope and arena of business as more outlets were opened. This introduction brought the opportunity of foreign market penetration for Subway.


Variety

For production of the sandwiches, salads and wraps, variety of breads, sauce and cheese are used. The breads have wide ranging size and shapes. Along with the breads, bacons are also of many types. The toppings of sauce and cheese are presented in various ways for luring the customers.  High variety of breads helps the chefs to prepare different types and kinds of sandwiches for catering to the specific tastes and preferences of the customers. In salads, the chefs use various kinds of lettuce, which aligns with the needs, demands and requirements of the customers. The salad toppings are inserted according to the instructions of the customers. Choice is given to the customers regarding the salad toppings in the food items. This variation is also applicable in the cheese toppings. Here, the employees adhere to a policy, which warns the chefs regarding not to use the sliced or shredded cheese as a local topping. Instead, crumpled sized cheese can be used. Toppings are also wide-ranged- solid and liquid. There are specifications, which all the restaurants need to follow.

Variation in demand

The customers of Subway are varied in their demands regarding the food orders. The children have a taste for spicy, chocolaty and creamy filling foods. The demands of the adults depend on their moods (Subway.com, 2017). Sometimes, they crave for chocolaty, crème filled items, and sometimes they want spicy items for energizing themselves. Variation is also there in the orders given by the customers. For example, customers ordering for sandwiches have tastes and preferences for gourmet bread, cheese toppings, and lettuce as salads. These orders changes according to the demands of the customers. Tackling with these wide-ranging demands of the customers is challenging for the personnel. Herein lays the appropriateness of the portion control packet, which serves the purpose of serving the customers their specified orders. In view of all these aspects, it can be said that the dimensions of variation in demand are high.

Variety

Visibility

Visibility relates to the transparency in the marketing operations. Not using adulterated materials in the preparation of the food items makes the fresh items visible to the customers. This aspect is mostly applicable in case of packaging processes. This is because of printing the ingredients on the packets. Visibility can also be connoted as the accessibility and contribution of the customers in the marketing operations of Subway. Social media connects the brand with the customers. The concept of “customer generated content” reflects the accessibility provided to the customers in terms of increasing the sales revenue of the operations. The buyers are not involved in the back office operations, which reflect a low visibility. Moreover, low visibility implies that the brand can receive quality production from the employees, who possess adequate skills, knowledge and expertise. This helps in keeping the company expenses low, which is assistance in terms of introducing lucrative and beneficial offers for the customers. Countering this, providing training to the employees regarding keeping the expenses low and utilizing the resources judiciously, proves beneficial in terms of achieving the identified and the specified objectives.

The personnel of Subway envision the achievement of maximum profit margin through the increase of sales revenue. The employees, after their recruitment are exposed to certain guidelines for making effective and judicious utilization of the organizational resources (Subway.com, 2017). Here, the focus is mainly on the finance. The managers make keen observation for the orders and purchases made by the customers. Utilization of paperwork helps the personnel to make the financial calculations in an efficient and effective manner. Making use of effective management techniques like evaluation, helps the managers of Subway to regulate the operations both of the internal and the external environment. Application of strategic management has enabled Subway to achieve the identified and the specified objective, being one of the world’s most valuable brands (Subway.com, 2017).

Exposure of strategic vision seems fruitful in terms of the yielding positive results in marketing. As a matter of specification, the performance objectives in case of Subway can be quality, dependability, speed, flexibility and cost.

The personnel need to pay extra attention to the quality of breads, lettuce, cheese and the toppings, which needs to be put in the sandwiches and the other food items. This is in terms of regulating the health conditions of the customers.

The personnel are dependent on the suppliers and distributors for getting quality materials for preparing the food items. Contracts, deals and trades connect the customers with the shareholders. Adopting illegal means attaches negative connotations to this dependability.

Variation in demand

The personnel are expected to deliver the orders to the customers in less time. There is a rule that keeping the customers waiting for more than 2.5 minutes can compel the staffs to lose their jobs. However, preparation time of the foods is considered.

Subway personnel need to be flexible enough for achieving large-scale customer satisfaction. For this, constructing effective and judicious plans would be a wise step in terms of coming up with something innovative for luring the customers.

Adopting latest and innovative technologies have upgraded the standard and quality of the food items in Subway. This, in turn, has increased the sales revenue and added maximum value to the profit margin. As per the data of 2016, Subway succeeded in increasing the sales revenue from 3.7% to 5.8 million dollars. However, there is still lot more distance to cover, especially in the financial parameter. Indulging in partnership with the trade union members would be effective in terms of setting and regulating the prices of the food items. This would enable the middle class customers to exercise their purchasing decisions in terms of catering to their specific tastes and preferences.

Subway experiments with organizations like GrubHub Inc, Postmates Inc and DoorDash Inc among others. However, Subway has still not indulged in partnership with any of these organizations. Partnership with Apple Pay, Starbucks corp’s mobile apps has proved fruitful for Subway in terms of expanding the scope and arena of the business. The major drive behind this the ease of the customers in terms of satisfying their appetite cravings. Moreover, mobile orders have escalated the sales revenue largely (Subway.com, 2017).

Positive aspects

Widespread presence of the outlets has enhanced the reputation of the brand. Most importantly, adoption of latest and modern technologies has upgraded the quality and standards of the food items. Herein lays the appropriateness of the mobile apps for helping the customers to order the food with much ease. Self-ordering kiosks have reduced the worries and tensions of the customers regarding receiving lip-smacking delicacies (Subway.com, 2017). Hazards and risk control policies reflects the conscious attitude of the personnel towards the wellbeing of the customers. Wearing gloves while preparing the food is an indication of hygiene maintenance for looking after the health issues of the customers.

Negative aspects

Franchise is one of the biggest challenges, which Subway is facing. This has strained the finance of the company, increasing the difficulties in terms of stabilizing the prices of the manufactured food items. Moreover, it has generated conflicts between the brands and the shareholders (Subway.com, 2017).

Visibility

Evaluation and supervision of the operations helps the managers to estimate the progress. Along with this, evaluation has assisted the managers in terms of making plans regarding adopting the changes in response to the identified drawbacks. One of these changes is the adoption of social media for expanding the scope and arena of the business. Within this, mobile ordering is an immediate solution for satisfying the hunger cravings of the customers (Subway.com, 2017).

Technological advancement has upgraded the standard and quality of the food items. This is an answer to the era of 2016, when Subway encountered 1.3% decline in the sales revenue. Effective utilization of the modern machines has resulted in the production of quality food items for the customers, which has pushed the sales revenue and added value to the profit margin. Along with this, hiring more employees have added to the workforce, resulting in the successful completion of the orders within the stipulated time (Subway.com, 2017).

Providing variety and choice has assisted the customers in exercising their purchase decisions in terms of their needs, demands and requirements. Supervision in this case has enhanced the aspect of health and hygiene in terms of the wellbeing of the customers. Herein lays the appropriateness of the risk mitigation strategies and policies.

Close monitoring of the performance exposed by the employees have helped the managers to set appropriate performance appraisals. Most importantly, training has enhanced the preconceived knowledge of the employees regarding the efficient and effective ways of serving the customers and gaining large-scale customer satisfaction (Subway.com, 2017).

The intensity of the demands in Subway is very high. This is because of the various types of materials available to the personnel for the preparation of the food items. Herein lays the appropriateness of the portion control packet, which helps the personnel to regulate the topping packets. The customers are provided with the choice, which is regulated by the managers. Here also there are restrictions as to the limit till which they can place the orders. As a matter of specification, the customers could make upto 8 variable orders for the salad toppings. This type of management is an example of the micro-level management. On the other hand, adopting latest and innovative technologies for the preparation of quality, healthy and fresh food items is an example of the macro-level management (Bromiley & Rau, 2016).

The above figure represents the process of marketing for Subway. Here, planning is a crucial component in terms of achieving positive outcomes. Prior to planning, knowing the needs of the customers helps the personnel to produce food items accordingly. Countering this, reviewing the financial condition is important in terms of introducing lucrative schemes, offers and discounts for luring the customers towards the brand (Spring et al., 2017). Advertising helps the personnel of Subway to expand the scope and arena of the business, progressing towards the foreign market penetration. Strategic vision is needed here, as it helps in systematizing the business activities for reaching to the benchmark level of performance.

References

Bromiley, P., & Rau, D. (2016). Operations management and the resource based view: Another view. Journal of Operations Management, 41, 95-106.

Brown, S., Bessant, J. R., & Lamming, R. (2013). Strategic operations management. Routledge.

Francis, M., Fisher, R., Thomas, A., & Rowlands, H. (2014). The meaning of ‘value’in purchasing, logistics and operations management. International Journal of Production Research, 52(22), 6576-6589.

Hitt, M. A., Xu, K., & Carnes, C. M. (2016). Resource based theory in operations management research. Journal of Operations Management, 41, 77-94.

Khanna, R.B., 2015. Production and operations management. PHI Learning Pvt. Ltd..

Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2013). Operations management: processes and supply chains (Vol. 1). New York, NY: Pearson.

Slack, N. (2015). Operations strategy. John Wiley & Sons, Ltd.

Slack, N., Brandon-Jones, A. and Johnston, R., 2013. Operations management. Pearson.

Spring, M., Hughes, A., Mason, K., & McCaffrey, P. (2017). Creating the competitive edge: A new relationship between operations management and industrial policy. Journal of Operations Management, 49, 6-19.

Subway.com (2017), About us, Retrieved 6th November 2017 from https://order.subway.com/

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